Saudi Arabia’s appointment of three labor ministers in three years “highlights the challenges” its economy faces in creating jobs, Monica Malik, chief economist at Abu Dhabi Commercial Bank, told Bloomberg on Tuesday.
The Kingdom’s unemployment rate continued to rise last year, despite the measures and programs been made by the Saudi government to increase jobs for nationals in the last few years, she added.
Nonetheless, the country’s Saudization drive has managed to create jobs for Saudi citizens, while reducing the number of expatriates employed in the Kingdom.
“Over 100,000 new jobs [were] created for nationals. At the same time, expatriate labor fell by 450,000, so there has been some replacement. But it also highlights that a number of jobs are being lost as a result of these policy measures,” Malik said, referring to the latest data released.
The economist highlighted that with the Saudi social reforms, more women will look to enter the workforce, increasing the number of jobseekers in the Kingdom. To tackle unemployment, the private sector will have to drive job creation but is being affected by the austerity measures.
“With the weak demand backdrop and weak growth, you’re not seeing that much investment by the private sector and job creation,” Malik said.
On Saturday, King Salman named Ahmed bin Suleiman al-Rajhi, who comes from one of Saudi Arabia’s largest banking families, as the new Minister of Labor and Social Development.
Appointing a minister from the private sector is very important, Malik said, as it emphasizes that the private sector will have a critical role in driving job creation for Saudis going forward.
“The government can’t continue to hire Saudis,” she added.
The unemployment rate among Saudis stood at 12.8 percent in the fourth quarter of 2017, according to data from the Kingdom’s General Authority for Statistics.
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